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Currency War: U.S. Hedge Funds Mount New Attacks on China's Yuan

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Re: Currency War: U.S. Hedge Funds Mount New Attacks on China's Yuan

#121

Post by simonh »

neximo4 wrote: post #99
aminorex wrote: post #40

Earlier quoted context omitted.

China is an exceptional case. It has a long tradition that way.

Recently someone at Davos asked a PRC rep about this and he mentioned the number is close but is often different due to smoothening. He did mention it is close and showed that tax revenues grew quite close to the GDP rate. This is something that does not typically happen when GDP decreases or is far off from the actual numbers.

There are many economic indicators that correlate to GDP growth, but are also influenced by other factors and so the strength of the correlation can be strong or weak at any given time. This means at any given moment you can probably pick or chose one or more other indicators to back up any particular contention about GDP, but that doesn't really prove anything. To get a good picture you need to look at a wide variety of indicators. If the vast majority of them indicate the GDP growth measure is wrong, then even if a few of them back it up it's still likely that the growth measure is being fiddled.

Re: Currency War: U.S. Hedge Funds Mount New Attacks on China's Yuan

#122

Post by neximo4 »

simonh wrote: post #121
neximo4 wrote: post #99

Earlier quoted context omitted.

Recently someone at Davos asked a PRC rep about this and he mentioned the number is close but is often different due to smoothening. He did mention it is close and showed that tax revenues grew quite close to the GDP rate. This is something that does not typically happen when GDP decreases or is far off from the actual numbers.

There are many economic indicators that correlate to GDP growth, but are also influenced by other factors and so the strength of the correlation can be strong or weak at any given time. This means at any given moment you can probably pick or chose one or more other indicators to back up any particular contention about GDP, but that doesn't really prove anything. To get a good picture you need to look at a wide variet…

There are many but wouldn't you agree tax revenues are a rather hard indicator to fudge if GDP decreases? Tax revenues are very well correlated to GDP, in downturns too.

6% is also a rather large increase YoY for the Chinese MoF's tax receipts. It is difficult to make hard cash of such a large number up.

I think what has happened is China actually grew faster than the claimed 7-9% in the past decade and now the amount is smoothened to reflect this

I've always noticed a sway on HN to downplay China's growth, given the large American audience this is quite expected. But it is good to be impartial to understand the changes a bit better.

Re: Currency War: U.S. Hedge Funds Mount New Attacks on China's Yuan

#123

Post by error_logic »

um_ya wrote: post #108
error_logic wrote: post #85

Earlier quoted context omitted.

Government is not the only form of centralization of power. Private entities pose similar threats, at a certain point. Sanders: "If an institution is too big to fail, it is too big to exist." Government can centralize things, yes. It can also break up existing centralized markets...and increase healthy competition.

Sanders is simply taking power from several financial elites, and giving it to a single centralized authority. Sanders fails to realize that the biggest institution that is too big to fail, is the U.S. government. We should spend more time dismantling all the government powers, and not adding to them.

The increasing centralization of things like emergency powers that state governors once controlled (details would take research to cite) is worrisome and you make a fair point.

You lost me when you said "all" powers though. The Constitution is a 2nd draft for a reason: We need some centralized power to keep a unified front in order to benefit from the economy of scale it provides.

Re: Currency War: U.S. Hedge Funds Mount New Attacks on China's Yuan

#124

Post by crdoconnor »

coliveira wrote: post #12
GreaterFool wrote: post #6

Isn't everyone and their dog trying to devalue their currency these days to boost exports? What's the problem with weak yuan? Sure, iPhones will get even more expensive to buy in China (rather funny since they are made there) but other than that it should be a boon to exports, no?

Devaluing the currency is great for exporting countries, but remember that China's official plan is to develop a consumer based economy. People who use a devalued currency have no purchasing power and inflation can become a huge problem for growth.

If that were actually their plan they would be strengthening their safety net. The Chinese savings glut (and lack of consumer based spending) is driven in no small part about fear of getting ill, growing old poor, etc.

Re: Currency War: U.S. Hedge Funds Mount New Attacks on China's Yuan

#125

Post by dragandj »

932874 wrote: post #73
ars wrote: post #70

Earlier quoted context omitted.

No, they don't. They might have "Americans are best", but not Us against the World.

I'll guess your country isn't on this list. > Instances of the United States overthrowing, or attempting to overthrow, a foreign government since the Second World War. (* indicates successful ouster of a government) China 1949 to early 1960s Albania 1949-53 East Germany 1950s Iran 1953 * Guatemala 1954 * Costa Rica mid-1950s Syria 1956-7 Egypt 1957 Indonesia 1957-8 British Guiana 1953-64 * Iraq 1963 * North Vietnam 1…

> Yugoslavia 1999-2000 *

First, it is not Yugoslavia, but Serbia. Second, USA has nothing to do with it. They only gave financial and logistic support to the opposition for political activities against the dictatorship. Should it be mentioned that the dictatorship that was overthrown had previously ruined and robbed its citizens, and had only a minority support of the citizens? Should also be mentioned that the dictatorship was brutally using police and army against its own citizens, killed political opponents, falsified several election results, push the country through several wars, etc...

Re: Currency War: U.S. Hedge Funds Mount New Attacks on China's Yuan

#126

Post by 1stop »

tim333 wrote: post #42
mahranch wrote: post #3

China's economic growth simply isn't sustainable, and that's even if it was true growth. There isn't a top economist alive who believes China's self-reported GDP numbers aren't fudged in one way or another (source: http://www.businessinsider.com/economist-reactions-to-chinas... ). Either one of those situations (an economic slowdown, China fudging the numbers, or the more likely situation: a combination of both) make…

>China's economic growth simply isn't sustainable, and that's even if it was true growth People have been naysaying China for a while but it's kept merrily growing. Mostly it's because the Chinese tend culturally to be pro education and hard working but in China were reduced to very low incomes by Mao's communism and have since been recovering and getting back towards the kind of economy they have in Taiwan, Hong Kon…

It wasn't Mao, it was a civil war coupled with a foreign occupation. Ever since then, their wealth has grown (including during Mao)

Re: Currency War: U.S. Hedge Funds Mount New Attacks on China's Yuan

#127

Post by simonh »

awakeasleep wrote: post #86
PakG1 wrote: post #19

What I'm about to say is unfortunate but true. China has a big us against the world mentality. Economic "attacks" are often seen as attacks by nation states, not by individuals, and as such, directly reflect foreign policy attitudes. Language like this only adds fuel to the fire. Given the different worldview about how the world works, motivations will always be suspect. Official party mouthpieces will never view suc…

When I think about it, it's hard to see how this isn't an attack by us. If this speculation hurts China, then some citizens US citizens have used a tool to attack and 'injure' a soverign nation. Seems like that would be our responsibilty the same way it'd be our responsibilty if we had a citizen milita that staged a raid into another country. Or it's your responsiblity if your kid breaks your neighbor's windows. And…

Nobody is doing anything wrong though. They are simply buying and selling on open markets. They're not even breaking any Chinese law, or in many cases even doing anything in China itself. Any harm that comes to the Chinese economy will actually be inflicted by China trying to support policies that are not economically viable, but by the hedge funds.

When George Soros, based in New York, 'broke' the bank of England it was not an attack on Britain either by him or the US. He broke no laws. In fact by showing that the ERM was unsustainable and thereby preventing us adopting the Euro* he did us a massive favour. The UK economy is eternally in his debt.

* Alright, it's a bit of a stretch laying that entirely at his feet, but in an alternate timeline where we stayed in the ERM Euro membership was the logical outcome.

Re: Currency War: U.S. Hedge Funds Mount New Attacks on China's Yuan

#128

Post by 1stop »

sharetea wrote: post #93
gscott wrote: post #83

Earlier quoted context omitted.

This is not exactly true the contract manufacturers are being paid to learn to make their own phones and they are. http://www.wsj.com/articles/foxconn-aims-to-fashion-its-own-...

Foxconn is a Taiwanese company

... The factories are still in China, meaning Chinese are gaining the skills and thus creating an industry for themselves

Re: Currency War: U.S. Hedge Funds Mount New Attacks on China's Yuan

#129

Post by 1stop »

rhizome wrote: post #87
gscott wrote: post #83

Earlier quoted context omitted.

This is not exactly true the contract manufacturers are being paid to learn to make their own phones and they are. http://www.wsj.com/articles/foxconn-aims-to-fashion-its-own-...

Now all they need is a billion dollar marketing department.

It's called Huawei, or Xiaomi.

Re: Currency War: U.S. Hedge Funds Mount New Attacks on China's Yuan

#130

Post by jbssm »

It's quite interesting this news comes out when USD is taking an heavy hit against HKD for the last days: https://finance.yahoo.com/q?s=usdhkd=X

Depending in the leverage they used for betting against the HKD these people might be at a serious risk of loosing everything they put there in case the trend doesn't suddenly change or if they don't get enough money from other sources to hold their leverage.

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